Quick answer
The DCF enterprise value is the present value of projected cash flows plus the discounted terminal value: EV = Σ CFₜ ÷ (1 + r)ᵗ + [CFₙ(1 + g) ÷ (r − g)] ÷ (1 + r)ⁿ. Cash flows of 100, 110 and 120 at a 10% discount rate and 2% terminal growth give $1,421.49: $271.98 from the cash flows and $1,149.51 from the terminal value.
Enter projected cash flows, a discount rate and a terminal growth rate. The calculator returns enterprise value and its two parts.
Related tools: Cash on Cash Return Calculator: Annual pre-tax cash flow relative to the cash you invested. Investment Calculator: Project investment growth from a rate of return you choose. Financial Calculator: Time-value-of-money solver for N, rate, present value, payment or future value.
How to use the Discounted Cash Flow Calculator
- Type projected cash flows (years 1 … n), for example 100, 110, 120.
- Enter discount rate (%) (between 0 and 100).
- Enter terminal growth rate (%) (between -50 and 50).
- Press Calculate to see the result, and use Reset to start again.
| Input | What to enter | Allowed values |
|---|---|---|
| Projected cash flows (years 1 … n) | Text, such as 100, 110, 120 | — |
| Discount rate | A number, in % | > 0, ≤ 100 |
| Terminal growth rate | A number, in % | ≥ -50, ≤ 50 |
Formula and method
Formula
EV = Σ CFₜ ÷ (1 + r)ᵗ + [CFₙ(1 + g) ÷ (r − g)] ÷ (1 + r)ⁿ
IEEE-754 double precision; money shown to cents, rates to 4 decimals. Results are estimates, not financial advice.
Gordon-growth terminal value after the last projected year; the discount rate must exceed the growth rate.
Worked examples
These examples are verified: each one is an automated test case that the live calculator must reproduce exactly.
Example 1
Inputs: Projected cash flows (years 1 … n) = 100, 110, 120; Discount rate = 10; Terminal growth rate = 2.
| Result | Value |
|---|---|
| Enterprise value | $1,421.49 |
| PV of cash flows | $271.98 |
| PV of terminal value | $1,149.51 |
Example 2
Inputs: Projected cash flows (years 1 … n) = 50, 60, 70, 80, 90; Discount rate = 12; Terminal growth rate = 3.
| Result | Value |
|---|---|
| Enterprise value | $828.66 |
| PV of cash flows | $244.21 |
| PV of terminal value | $584.45 |
The first line is the headline result (enterprise value). Below it the discounted Cash Flow Calculator lists pV of cash flows and pV of terminal value, which describe the same case from other angles. IEEE-754 double precision; money shown to cents, rates to 4 decimals. Results are estimates, not financial advice.
Terminal value dominates
Here 81% of the value comes from the terminal value, which is typical and shows how sensitive DCF is to growth and discount-rate assumptions. Terminal value = 120 × 1.02 ÷ 0.08 = $1,530, discounted three years.
Assumptions
The discount rate must exceed the growth rate or the formula breaks down. A 1% change in discount rate can move the value by 10% or more. DCF gives enterprise value; subtract net debt to get equity value.
How the result changes with discount rate
Holding every other input at the first worked example, this table changes only discount rate. It shows how sensitive the answer is to that one value; each row was produced by running this calculator.
| Discount rate | Enterprise value | PV of cash flows | PV of terminal value |
|---|---|---|---|
| 5 | $3,823.13 | $298.67 | $3,524.46 |
| 10 | $1,421.49 | $271.98 | $1,149.51 |
| 20 | $622.69 | $229.17 | $393.52 |
| 40 | $288.67 | $171.28 | $117.39 |
What happens with invalid input
These messages are produced by the calculator itself, so you know what to fix.
- Terminal growth rate: entering "6" shows "The growth rate must be lower than the discount rate." beside that field and no result.
- Projected cash flows (years 1 … n): left empty shows "Enter projected cash flows (years 1 … n)." beside that field and no result.
Choosing between the Discounted Cash Flow Calculator and similar calculators
Each row shows what a related calculator on this site asks for and what it returns, so you can pick the one that matches your question.
| Calculator | You enter | It returns |
|---|---|---|
| [Cash on Cash Return Calculator](/real-estate/cash-on-cash-return-calculator/) | annual pre-tax cash flow and total cash invested | Cash-on-cash return |
| [Investment Calculator](/finance/investment-calculator/) | initial amount, annual interest rate and years | Projected value |
| [Financial Calculator](/finance/financial-calculator/) | solve for, periods per year and payments | Future value (FV) |
| [IRR Calculator](/finance/irr-calculator/) | initial investment and cash flows | IRR |
| [CAGR Calculator](/finance/cagr-calculator/) | beginning value, ending value and years | CAGR |
Background: interest, saving and investing
A nominal rate (APR) does not include the effect of compounding; the annual percentage yield (APY) does: APY = (1 + r/n)^n − 1. A 5% nominal rate compounded annually is 5.000%, semi-annually about 5.063%, quarterly about 5.095% and monthly about 5.116%, so more frequent compounding helps, but with diminishing returns.
The rate you enter in a projection is an assumption, not a promise: real returns vary and can be negative. Fees and taxes are not modelled unless the page says so.
Assumptions and limitations
- Discount rate must exceed growth rate
Results are estimates for planning, not financial advice. Lender terms, fees, taxes and rounding rules can change real figures, so confirm important numbers with your lender or a licensed adviser.
If a required value is empty, not a number, or outside its allowed range, the form marks that field with a message and shows no result instead of a misleading number. The automated checks deliberately try invalid entries for terminal growth rate and projected cash flows (years 1 … n) to confirm this.
Frequently asked questions
What discount rate should I use?
Often the weighted average cost of capital.
How long should the forecast be?
Typically 5 to 10 years.
Is DCF accurate?
Only as accurate as its inputs.
What does the Discounted Cash Flow Calculator calculate?
Value of projected cash flows plus a terminal value. It returns Enterprise value, PV of cash flows and PV of terminal value.
What formula does the Discounted Cash Flow Calculator use?
EV = Σ CFₜ ÷ (1 + r)ᵗ + [CFₙ(1 + g) ÷ (r − g)] ÷ (1 + r)ⁿ. Gordon-growth terminal value after the last projected year; the discount rate must exceed the growth rate.
What do I need to enter in the discounted Cash Flow Calculator?
You enter Projected cash flows (years 1 … n), Discount rate (%) and Terminal growth rate (%).
How is the result rounded or limited?
IEEE-754 double precision; money shown to cents, rates to 4 decimals. Results are estimates, not financial advice. Discount rate must exceed growth rate.
What is an example of a discounted Cash Flow result?
With projected cash flows (years 1 … n) 100, 110, 120, discount rate 10 and terminal growth rate 2, the enterprise value is $1,421.49.
Can I rely on this calculator for a decision?
Results are estimates for planning, not financial advice. Lender terms, fees, taxes and rounding rules can change real figures, so confirm important numbers with your lender or a licensed adviser. For this calculator in particular: Discount rate must exceed growth rate.
Related calculators
- Cash on Cash Return Calculator — Annual pre-tax cash flow relative to the cash you invested.
- Investment Calculator — Project investment growth from a rate of return you choose.
- Financial Calculator — Time-value-of-money solver for N, rate, present value, payment or future value.
- IRR Calculator — Internal rate of return of an investment from its yearly cash flows.
- CAGR Calculator — Compound annual growth rate between two values.
- Present Value Calculator — Today's value of a future amount at a given discount rate.
- Cash Back Calculator — Cash back earned on card spending.
- Appreciation Calculator — Total and annualized appreciation between two values.
- Portfolio Return Calculator — Weighted return of a portfolio from asset weights and returns.
Sources
- Standard time-value-of-money relations (e.g. Brealey, Myers & Allen, Principles of Corporate Finance)
Content last reviewed 2026-11-04. Formulas and worked examples are checked by automated tests against independently computed values.